Fresh legal issue over GTL's Mumbai land

Property developer HDIL has objected to cigarette maker Golden Tobacco Ltd (GTL)’s renewed plans to sell four acres of its land in the Andheri area of Mumbai, expected to be worth around Rs 100 crore. HDIL was earlier supposed to get the land, but the deal was called off in May, for alleged non-payment of dues. GTL re-issued a tender notice for the land sale last week.

HDIL is believed to be considering legal options against GTL to stay the auction, according to television reports today.

“We have paid part-consideration under the said memorandum of understanding. The said MoU is valid and binding on Golden Tobacco. Any person purchasing the said property will be doing so at their own risk as to the cost, charges and consequences,” HDIL said in a public notice today.

The income tax department has also objected to GTL’s plans, saying it had initiated recovery proceedings against the company. Hence, GTL was not “competent to mortgage, charge, lease or otherwise deal with the property, except with the permission of the tax recovery officer,’’ the department said in a public notice in newspapers last week.

According to reports, GTC owes around Rs 700 crore to the department.

HDIL executives did not respond to calls. In a televison interview, Sanjay Dalmia, chairman of Golden Tobacco, said the company will go ahead with the e-auction. In February this year, GTL entered into an MoU with HDIL to sell the property in Marol, Andheri, for Rs 70 crore. The deal was reportedly called off as HDIL did not pay an instalment of Rs 30 crore by May and forfeited the advance money of Rs 7 crore.